🤔 How much should invest in Bitcoin?

GM everyone. This is 2036. We scroll for gems all day so you don’t have to.

Here’s what we’re serving up today 🍲: The Bitcoin ETF will likely get approved tomorrow. In anticipation, Bitcoin crossed $47,000 for the first time in over 18 months. But how much of your portfolio should you invest in Bitcoin?

Let’s dig in.

As Tony Robbins says - success leaves clues, baby.

There’s no one-size-fits-all all, but if you’re undecided about how much money you should allocate to bitcoin (and crypto in general), here is how 3 famous investors approach the subject:

1/ The diversified portfolio approach 🏦

This is what most wealth managers and pension fund managers do. A famous example is Ray Dalio.

A typical diversified portfolio has up to 15 uncorrelated assets - meaning assets that don’t go up or down simultaneously. As assets increase and decrease over time, you buy and sell accordingly to re-balance your portfolio.

Assets that are included in a classic diversified portfolio include stocks, bonds, inflation-protected bonds, commodities, gold, etc.

From that lens, bitcoin should get a 1-5% allocation in your overall portfolio, similar to gold or general commodities.

2/ The hedge fund manager approach 📈

Hedge fund managers are typically investors who can stomach risk and make returns by being right. They’re trying to outperform the market, not simply protect themselves against volatility.

Hedge fund managers routinely invest up to 40% of their assets in one high-conviction idea.

Although Warren Buffett doesn’t technically operate a hedge fund, his thinking is similar. Almost 50% of Berkshire’s portfolio is in Apple stock today.

Paul Tudor Jones is another famous hedge fund manager. Last year, he recommended a group of private investors put at least 20% of their assets in bitcoin each.

3/ The individual or corporate investor approach 🟠

Individual investors or corporations can adjust their allocations according to their conviction and risk appetite.

Michael Saylor is an example of a high-conviction individual and corporate investor. He actively borrows money to buy bitcoin.

To him, four years is a short time frame for bitcoin. Ten years is a normal time frame. But the best timeframe is forever.

Individual investors or corporations can allocate 100% of their assets or treasury to bitcoin. The goal is to outperform inflation over the long run and generate returns on a 10+ year timescale.

If you're undecided, you can start small and increase your allocation over time.

But get ready - because 44% of Bitcoin’s gains have come in the 12 months after the Bitcoin halvings.

And the next one is just 4 months away…👀

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1/ GBTC discount falls to lowest in 18 months

2/ Standard Chartered Bank: Bitcoin will reach $200,000 by 2025

3/ Former SEC chair calls Bitcoin ETF inevitable